IRS grants reprieve to Hurricane Sandy victims

Real Estate Tax Talk

By Stephen Fishman, Friday, November 2, 2012.

Queens, N.Y. in the aftermath of Hurricane Sandy. Photo by Walt Jennings/FEMA.

If you're affected by the Hurricane Sandy disaster, the last thing you want to have to worry about is meeting IRS tax filing and payment deadlines. Fortunately, the IRS understands this and is willing to help.
IRS regulations provide that whenever there is a federally declared disaster the IRS may postpone various tax filing deadlines for taxpayers in the affected area by as much as one year. This includes filing income tax returns and paying taxes due.
Such relief applies to:

any individual whose principal residence is located in a covered disaster area.
any business entity or sole proprietor whose principal place of business is located in a covered disaster area.
taxpayers not in the covered disaster area but whose records necessary to meet an IRS deadline are in such area.
any relief worker assisting in a covered disaster area.
the spouse of an affected taxpayer for purposes of filing a joint tax return.
any individual visiting the covered disaster area who was killed or injured as a result of the disaster.

This relief is automatic -- taxpayers need not take any action to qualify for it other than come within one of the above categories. The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply.

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The IRS has already postponed one deadline for Sandy victims: It has granted taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due Oct. 31.
The IRS also announced that it is in the process of postponing many more tax deadlines for taxpayers affected by Hurricane Sandy or otherwise impacted by the storm that hit the Mid-Atlantic and Northeastern United States. It will post these announcements on its Tax Relief In Disaster Situations Web page.
Currently, federal disaster area declarations due to Hurricane Sandy have been made for multiple counties in Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, West Virginia, as well as the District of Columbia. By visiting the Federal Emergency Management Agency (FEMA) website, you can easily find out if your county has been declared a federal disaster area.
If you live in the Sandy disaster area and receive a penalty notice from the IRS, you should call the telephone number on the notice to have the IRS abate any interest and any late-filing or late-payment penalties that would otherwise be due.
The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who live or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.
Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

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